EDITORIAL NEOPOST S MOMENTUM CONTINUES IN 2011

Transcription

1 2011 LANDMARKS

2

3 EDITORIAL NEOPOST S MOMENTUM CONTINUES IN 2011 In North America, Europe and the Asia-Pacific region, 2011 was a robust year for Neopost. There was a number of new initiatives and successes in 2011, including new product launches, development of services, numerous contracts won in the area of logistics and the expansion of data management activities. In the course of the year, day after day, the Group s staff continued to find innovative ways of improving communications for companies and organisations, build solid relations with Neopost clients and partners and commit itself to an environmentally-friendly approach. Our achievements for the year are shown on each of the pages that follow. 1

4 C ONTENTS 2

5 LANDMARKS 2011 CONTENTS PROFILE 4 Neopost DIALOGUE 6 Interview with Denis Thiery, Chairman and CEO PORTRAIT 10 Management team TRENDS 12 A changing world WORLDWIDE 14 International presence 16 Around the world in 2011 HIGH-TECH 18 Renewed product ranges 22 Research & Development GOOD ADDRESSES 24 Data quality AT YOUR SERVICE 26 Making even more of a difference 28 Client testimonials TRAVEL 30 Tracking parcels and goods SPECIAL FEATURE 32 Responsibilities and commitments MEETING 36 Board of Directors FINANCE 38 Neopost on the stock market indicators summarised financial statements 3

6 A specialist in mail preparation and processing, Neopost supplies innovative and evolving solutions for mail and parcel processing, data and document management, and logistics. Neopost offers comprehensive solutions that include equipment and infrastructure, with a broad range of software, online services, as well as maintenance, advisory services and financing. T o allow companies, public authorities and associatons to focus on their core business activities, Neopost puts technology at the service of the quality of their relations with their customers. WE VALUE YOUR MAIL 4

7 LANDMARKS 2011 PROFILE 1st in Europe 2nd in the world 18 countries in which Neopost operates directly 90 countries in which Neopost solutions are sold 5,500 employees 800,000 clients worldwide 1,002,600,000 in sales in

8 INTERVIEW DENIS THIERY Chairman and Chief Executive Officer You have topped the 1 billion sales mark and your operating margin remains just as high. What are the key factors behind this performance? DENIS THIERY: We achieved a very impressive performance in In addition to exceeding the symbolic threshold of 1 billion, there are other reasons to be satisfied. Firstly, three-quarters of sales were generated outside France, which illustrates Neopost s strong international dimension. Furthermore, the 5.6% increase in sales at constant exchange rates stems from growth in all regions, all business lines and every category of revenues. At the same time, we managed to maintain operating margin of over 25%. I believe that this performance relates as much to our commercial performance and the competitiveness of our products and services, as to our rigorous management and the relevance of our business model, year after year. With the acquisition of GBC-Fordigraph in Australia, you have new aims for the Asia-Pacific region. Can you tell us more? D.T.: Optimising our distribution network is an integral part of our strategy. Acquiring our own distributors not only allows us to exercise tighter control over our marketing policy, but also provides an effective means of expanding our geographical presence. It is with this in mind that we acquired GBC-Fordigraph, our main distributor in Australia, in June This is a major acquisition, as GBC-Fordigraph represents additional full-year sales of 30 million. The integration of GBC-Fordigraph has proven particularly swift. In order to step up our development in this part of the world, we have opened a regional office in Singapore. The Asia-Pacific region, which represented sales of just 12 million in 2010, is expected to achieve sales of over 50 million in 2012, and our aim is to double this amount within the next three to five years marks your return to the low-end segment. What are your aims? D.T.: Over the past few years, we focussed on the mid and high-end markets, as we wanted to improve our profitability by increasing average revenues per customer. Cross-selling between our mailing and document management activities, as well as the development of services, have also made a significant contribution to this. We currently believe that we are in a position to increase our presence in the low-end segment, generating similar operating margin to other business lines. To do this, we have put in place a dedicated sales and support organisation in our major markets. This is based on remote handling of our prospects and clients via different means of communications, which allows us to avoid travel and increase productivity. The launch of the latest model in our IS range, the IS-280, a highly competitive entry-level mailing system, fits perfectly with our ambition in this segment. While we hope to be able to regain market share rapidly in this segment, this new organisational structure also allows us to redeploy our field sales teams to the mid and high-end segments. 6

9 LANDMARKS 2011 DIALOGUE In September 2011, you announced the adoption of a new optimisation plan. How is this plan progressing? D.T.: The continuous streamlining of our operations is very much part of our management culture, and the optimisation plan announced in 2011 fits in fully with this approach. The aim is to achieve additional savings whilst fostering new positive momentum thanks to a more efficient and dynamic organisational structure. The implementation of this plan is progressing well. In France, we have combined our two distribution subsidiaries so that we only use a single brand name and in order to optimise our coverage of the market. In the United States, the relocation of logistics activities to our head office in Connecticut has allowed for greater integration of this business with the rest of our operations. The relocation of address printer activities from Munich to Bagneux reflects the same aim. Economic conditions remain difficult and uncertain and Neopost is operating in a mature market. How do you see the future for your mail-related activities? D.T.: The mail room equipment market is a mature market. However, this is a highly profitable business which continues to provide strong recurring cash flows. We also have the capacity to create our own growth opportunities in this sector, with considerable strengths allowing us to develop our position as No. 2 worldwide and continue to capture a growing share of revenues in this market. To do this, we can count on the extension of our geographical presence, particularly in the Asia-Pacific region, as well as our commercial successes in high-end document 7

10 INTERVIEW CONT D management systems, for example, or the promising sales growth achieved directly with postal organisations. We shall also continue to apply the recipes for Neopost s success: investing in innovation, acquiring additional distributors, and developing leasing and financial services activities. We will then begin to capitalise on our new distribution channel dedicated to the low-end segment, and the focusing of our field sales teams on clients with the most complicated requirements. Our overall aim is to achieve growth of 2-3% a year at constant exchange rates in mail-related activities, while also maintaining high operating margin. You seem to be harbouring even greater ambitions in your associated activities not directly related to mail. D.T.: We already generate sales of around 80 million in activities not directly related to mail, such as address and data quality, shipping and tracking solutions, and document composition software. Our aim is to step up the rate of growth of this portfolio so that it represents sales of around 200 million within the next three years, on the basis of current exchange rates. This will be achieved through organic growth, acquisitions and the signing of partnership agreements. The logic behind this expansion lies in exploiting the potential represented by the quality of relations with our 800,000 clients and enhancing the range of solutions offered to them. As regards acquisitions more specifically, we have set ourselves a series of very clear investment criteria: we will be looking at niche markets offering potential for double-digit growth, synergies to be developed with our client base and acquisitions allowing us to achieve return on capital employed of around 15% after three to four years. What is the outlook for the next few years? D.T.: We are confident of our ability to continue to achieve profitable growth in revenues and market share in mail-related activities. At the same time, we want to step up the rate of growth in our associated activities. Our client base is made up of small and medium-sized businesses and institutions. In the long term, our aim is to support them through a series of issues relating to communications flows developed around and alongside traditional mailing activities. We believe that our clients will have a growing need for advice and technical assistance to manage and coordinate effectively all of the communications means they use. In total, and on the basis of current exchange rates, we believe that we are in a position to generate sales of around 1.2 billion within three years, with the proportion of revenues from activities not directly related to mail doubling from 8% to over 16% of total sales. Do you think that Neopost will be able to continue to pay high returns to its shareholders? D.T.: Despite the provision relating to the new optimisation plan, our net income has remained virtually stable and we have been able to maintain our dividend at the same level as last year, which illustrates the regularity of Neopost s returns to its shareholders. Neopost is in excellent financial health. Our equity has increased further and our debt has decreased despite the acquisition of GBC and the development of our leasing portfolio. Thanks to our recurring cash flow, we should be able to continue with our policy of paying out high returns, which along with the growth targets we have set increases the visibility we want to give to our shareholders. 8

11 LANDMARKS 2011 DIALOGUE We are confident of our ability to continue to achieve profitable growth in revenues and market share gain in mail-related activities. At the same time, we want to step up the rate of growth in our associated activities. 9

12 LANDMARKS 2011 PORTRAIT Management TEAM A CLOSE-KNIT TEAM TO STEER OUR ACTIVITIES AROUND THE WORLD The management team develops and implements Neopost s strategic choices around the world. The team consists of 13 senior managers, all of whom have a truly international profile. On the strength of the highly complementary skills of its members, the management team embodies and gives life to the Neopost spirit of ambition, progress and commitment. A DECENTRALISED STRUCTURE IN ORDER TO BE CLOSER TO OUR CLIENTS Focused on its clients and their concerns, the Neopost group gives its subsidiaries a high degree of operational autonomy. The limited number of hierarchical levels helps to circulate information and knowledge within the Group, as well as ensuring responsiveness and agility in decision-making. Neopost s decentralised structure encourages the values of taking on challenges and recognition. 10

13 from left to right Jean-François LABADIE Finance Thierry LE JAOUDOUR Supply chain Chris HOCKEY Human Resources Enno EBELS Data quality solutions Philippe BOULANGER R&D Gavin MACRAE Strategic partnerships Henri DURA Document management solutions Denis THIERY Chairman and Chief Executive Officer Susan MACKE Marketing & Strategy Clem GARVEY Europe, Asia-Pacific & Exports Alain FÉRARD Neopost ID Alain MIDOWSKI Legal Dennis LESTRANGE North America 11

14 A CHANGING WORLD The world is changing. In order to develop while also improving their efficiency, companies are reviewing their processes and integrating technical innovations into their organisational structure and systems. The postal sector is in a state of flux. Postal organisations are reinventing and modernising themselves. Efforts to improve efficiency and profitability are reflected by the growing automation of processing and delivery tasks. New operators are coming into the frame, particularly in Europe against the backdrop of the complete opening up of the sector to competition since January International trade of goods and services is growing. E-commerce is boosting parcel flows. ADDRESSES AND DATA, VALUABLE ASSETS Data relating to clients, suppliers and prospects are valuable for many of the company s departments, as a pre-requisite for successful monitoring of trade payables and receivables, orders, settlement of invoices and deliveries. This data is vital for organising and customising commercial operations and implementing effective direct marketing campaigns. Addresses that are incomplete, incorrect, illegible or which do not correspond to the recipient are sources of unnecessary expenditure for postal carriers and represent such an additional cost that incentive rates are introduced to improve their quality. Whether the automation of the processing of packages and letters, the profusion of media used to target clients, development of companies operations in other countries or the need to adapt to different coding systems for contacts, development of e-commerce, invoicing and delivery forms, this is a long list of factors attaching even more value to the company s data and the quality of this data. The quality of information used by companies and organisations is vital. Having data that is valid, consistent and up to date determines their commercial, administrative and financial performance. 12

15 Both at home and at work, individuals are increasingly solicited and receive a large amount of information. Capturing the recipient s attention means more than ever being able to combine traditional and new ways of interacting and offering the right content via the right medium. LANDMARKS 2011 TRENDS AT THE HEART OF COMMUNICATIONS STRATEGIES Transactional and relational exchanges: companies are communicating more and more with their clients and partners. Their targets receive more and more information and messages via a larger number of channels. In this context, how can you ensure that communications are effective? This is above all what is shown by the best response rate, which allows the company to trigger the desired action, such as payment of an invoice on reception, signing up for a service, following up on a promotional offer, requesting additional information or returning response coupons. In order to obtain these results, the various media - namely , text message, printed documents and websites - need to be complementary rather than in opposition. Of these, mail - which is known for its reliability, ease of use and the confidence it creates - maintains a place of its own in the ways chosen by individuals to receive information. From the viewpoint of companies, thanks to its capacity for targeting, mail is particularly effective and generates high reading and recall ratings. It is therefore a favoured marketing medium for customised promotions and loyalty campaigns. As a means of conveying image, mail remains a key part of the multi-channel system used by companies and organisations to strengthen relations with clients and develop their activities. MAILING SYSTEMS AND AUTOMATED MAIL PREPARATION: EFFECTIVENESS AND OPTIMISATION OF COSTS In view of the challenges relating to the postal medium, optimising its management is a major concern for companies. The first advantage of using a mailing system is the time saved by automating the tedious processes of weighing items and sticking on stamps, and avoiding the need to go to the post office. It also allows for savings to be achieved thanks to franking calculated to the closest cent and in accordance with the right pricing tariffs (the system s memory is updated each time postal tariffs are changed). Besides, an increasing number of postal organisations offer discounts for metered mail. The latest-generation mailing systems are true intelligent postage terminals. Connectivity - which allows for communication between the user and the postal operator, or even the installation of a network of machines - and the various software tools, mean that mailing systems can be used to control and manage mailing costs. Systems connection capabilities have also allowed for the development of online services to facilitate everyday use. The different models equipped with software and numerous accessories, such as a weighing platform, provide a response to the needs of all companies, large and small. From the everyday processing of a dozen or so standard items to the franking of several thousand envelopes of varying formats and content - such as accompanying letters, product documentation and return envelopes - mailing systems allow for greater efficiency and optimisation of mailing costs. 60 %, the percentage of US consumers who said they enjoy checking the mailbox for postal mail* * Source: Consumer Channel Preference Study - Epsilon Targeting December

16 INTERNATIONAL PRESENCE With 75% of sales generated outside France, Neopost already has a very strong international presence. North America - the world s largest market - accounts for 40% of its business and the Group is continuing to see strong growth in this region. Neopost is also expanding by means of extending its geographical coverage in other parts of the world. EXPANDING NEOPOST S PRESENCE Acquiring distributors is a long-standing means of pursuing the Group s strategy. By strengthening its local position in markets of appropriate size and rates of growth, Neopost increases its sales, optimises its distribution, becomes closer to its clients and achieves greater control of its installed base. This also gives it more control of the roll-out of its marketing strategy, such as the development of services or cross-selling between its various businesses. In 2011, the acquisition of GBC-Fordigraph was added to the long list of takeovers of distributors by Neopost over the last few years. Opportunities still exist in North America and Europe. This is also the case for the Asia-Pacific region, where the Group has considerable ambitions following the integration of GBC-Fordigraph and the creation of a regional office in Singapore. Neopost currently has a direct presence in 18 countries. However, its products and services are sold in a total of 90 countries, through indirect distribution networks that are better suited to the structure or maturity of the markets concerned. ➌ ➊ ➋ COMMERCIAL ORGANISATION Direct distribution Direct and indirect distribution Indirect distribution INDUSTRIALS AND RESEARCH AND DEVELOPMENT SITES UNITED STATES ➊ Memphis: logistics platform ➋ Milford: R&D ➌ Seattle: Satori Software FRANCE ➍ Bagneux: R&D ➎ Cavaillon: Logistics systems ➏ Le Lude: Production of high-end mailing systems and logistics platform UNITED KINGDOM ➐ Loughton: R&D; Production of high-end folders/inserters THE NETHERLANDS ➑ Drachten: R&D; Production of mid-end folders/inserters MALAYSIA ➒ Penang: Subcontracting of mid-end mailing systems production 14

17 LANDMARKS 2011 WORLDWIDE CREATION OF A REGIONAL OFFICE IN THE ASIA-PACIFIC REGION ❼ ❽ ❻ ❺ ❹ ❾ ❿ Neopost has a direct presence in Japan and now Australia. In the majority of south-east Asian countries - such as Thailand, Malaysia and Indonesia - we rely on a panel of distributors. In the specific case of India, we have set up an office of representation to manage our relationship with the Indian Post and to coordinate the activities of our dealers network. Singapore proved to be the best location for Neopost s regional office. The country is one of the most buoyant markets in Asia and offers an extremely dynamic environment, with many international companies having set up their regional head offices there. With its central location, Singapore is well positioned for commercial expansion throughout the Asia-Pacific region. CHINA ➓ Jiangmen and Shenzhen : Subcontracting of low-end mailing systems and folders/inserters production VIETNAM Hanoi: Subcontracting of R&D Gilles Nauche Managing Director Neopost Asia-Pacific 15

18 AROUND THE WORLD IN 2011 Applying a postmark with a franking machine effectively means printing money. As a result, the industry is highly regulated by accreditation, ownership rules and postal tariff structures, which are national in nature. This means that each country is a quite specific market. HIGHLY SPECIFIC LOCAL CHARACTERISTICS ACCREDITATION A franking machine can only be used subject to certification, accreditation of the supplier and approval of the ink used, by each country s postal authority. OWNERSHIP In some markets, Neopost remains the owner of franking machines installed at the premises of its customers, who must therefore rent the machines. This is the case in France. In North America, the obligation to rent equipment is limited to the meter, the part that tallies the franked amounts. In other markets, such as Germany and the United Kingdom, the user may own the entire machine. PAYMENT In most countries, the user s system must be credited to be able to frank mail. In France, postal charges are billed by La Poste on the basis of information recorded and transmitted by the franking machine every month. FRANKING The amount is calculated on the basis of the postage rates in effect in each country, based on the weight of the item. In the United States and the United Kingdom, in particular, the amount also depends on its shape and size. 16

19 LANDMARKS 2011 WORLDWIDE COUNTRY NEWS AUSTRALIA In June 2011, Neopost acquired GBC-Fordigraph, Australian market leader in the distribution of mail processing and document finishing solutions, with a solid reputation for quality, reliability and service. As the exclusive distributor of Neopost solutions, GBC won a call for tenders end of 2010 to supply around 100 DS-75 machines for the New South Wales Parliament. The successful integration of GBC- Fordigraph in 2011 has enabled Neopost to establish itself as No. 1 in the Australian market. Since March 2009, users of Australia Post s services have been able to send large letters and packages to other countries in just one click using the Click and Send online delivery solution of Neopost ID. In 2011, this service was extended to domestic mail. FRANCE Neopost has committed itself to a new sales and marketing drive combining its two distribution subsidiaries - Neopost France and Satas - in a single company operating under the Neopost name and allowing it to optimise its coverage of France. Activities relating to production mail solutions have been combined within a dedicated business unit that accompanies its clients in the roll-out and monitoring of their document management and addressing equipment. In 2011, Neopost won Chronopost s tender offer for complete management of its new mobile delivery tracking solution. GERMANY In 2011, Neopost completed the updating of its range of mailing systems with the launch of the IS-280, targeting low-volume mail senders, and the launch of a specific distribution channel for this market segment. Major contracts to supply high-end mailing and document management systems have been won with large clients. The development and technical support activities of Rena, a specialist in address printers - which was acquired in have been transferred to the research centre in Bagneux, France. INDIA Neopost recently set up a representative office in this modestly-sized market for the mailing systems industry that is nevertheless committed to the process of decertifying non-digital equipments. At the end of 2011, around 2,000 digital mailing systems had been installed since certification was obtained for Neopost machines and marketing began in summer RUSSIA Neopost obtained certification for its equipment in December The first call for tenders was won in the area of high-end mailing systems in early SCANDINAVIA Despite being among the European economies with the most advanced use of technologies, the Scandinavian countries nevertheless present attractive potential relating to the very strong financial incentives given to mail senders to use mailing systems, thereby encouraging the automation of processing by postal operators. Neopost has been able to capitalise on this and delivered a further strong performance in the region in SINGAPORE Neopost has set up its new regional office in Singapore covering operations in the Asia-Pacific region in order to achieve the Group s expansion aims in the region. Singapore Post has selected the new Neopost ID solution to develop the service that will allow all of its customers to prepare their parcels and registered mail items using their Internet browser. UNITED KINGDOM In 2011, Neopost capitalised on its new range of IS mailing systems, the roll-out of which was completed in late 2010, with the launch of the IS-280 entry-level model and the development of a dedicated distribution channel suited for this market segment. The United Kingdom was the first country for the expansion of Satori Software s activities outside the United States in the area of address quality management. UNITED STATES The roll-out of the IS range was completed in late 2011 with the launch of the latest model intended for low volumes, the IS-280, and the creation of a specific distribution channel. In folders/inserters, Neopost has successfully launched the DS-200, a high-end model. In 2011, the Group has won a significant number of calls for tender offers among large customers in both mailing systems and high-end document systems. The Research & Development centre specialising in package shipping has been transferred from Austin, Texas to Milford, Connecticut in order to bring together marketing and technical support teams, thereby creating an organisation able to seize new market opportunities relating to the development of e-commerce. 17

20 INTELLIGENT SYSTEM LATEST GENERATION MAILING SYSTEMS In 2011, the new range of IS mailing systems was fully rolled out in the major countries for Neopost: Canada, France, Germany, the United Kingdom and the United States. CONTINUING ROLL-OUT OF THE IS RANGE The first new generation models correspond to the middle of the range (from IS-350 to IS-480) and were launched between 2008 and The launch of the IS the new model marking Neopost s return to the entry-level segment - began at the end of 2010 and continued in In the high-end segment, the IS-5000 and IS-6000 models - already introduced in 2010 in the United States and then in Germany - were launched in Canada, France and the United Kingdom. In other countries, the roll-out of the IS range started with the launch of mid-range models in As regards the low-end segment, initial launches of the IS-280 took place in In 2012, Neopost will continue with the roll-out of the IS-280, IS-5000 and IS-6000 machines. We have created a specific organisation for the marketing of entry-level models. We are conducting marketing campaigns via the Internet or by telephone. We rely on particularly responsive remote sales teams that are equipped with appropriate IT tools. This allows us to reach users who can decide to buy the equipment very quickly. Elie du Pré de Saint Maur Remote Channels Director Europe Neopost IS 280 EFFICIENT AND EASY TO USE OFFICE EQUIPMENT - Modern and compact - Easy to use - 20 items per minute - Integrated weighing platform - LAN connection With the IS-280, Neopost offers a range of services such as downloading postal information and tariffs, ink level alerts and even remote diagnosis for low volumes users. 18

21 LANDMARKS 2011 HIGH-TECH The IS-6000 was designed with the user in mind, as demonstrated in particular by the colour touch screen that can tilt backwards and forwards and swivel left and right, an intuitive interface and the improved ergonomics of the work-station. The touch screen is close to the feeder, so requiring fewer operator movements and making loading and unloading operations more fluid. It is on the basis of these attributes that the IF Design jury awarded the IS-6000 a Product Design Award in the Office & Business category in October Yann Le Rigoleur Group Design Coordinator Neopost Technologies S.A. IS 6000 THE SYSTEM OF CHOICE FOR LARGE VOLUMES - Dynamic scale allowing for mail of various sizes, weight and dimensions to be processed at a rate of 10,800 envelopes an hour - Easy-to-use 15-inch touch screen - Comfortable working environment The IS-6000 is 20% more productive than other similar capacity mailing systems on the market. 19

22 DS RENEWAL OF THE RANGE OF DOCUMENT SYSTEMS The new DS-35 increases Neopost s competitiveness in the entry-level segment, while the launch of the DS-200, suited to the needs of clients who previously had to use production machines, gives us the means to win new clients. Franck Sillard Head of Group Strategic Marketing Document management systems Neopost In 2011, Neopost further extended its range of document systems with the successful launch of the DS-35 entry-level model and the DS-200 high volume folder/inserter. NEW LAUNCHES IN THE DS RANGE The new generation of DS machines and associated software meet the needs of all clients, from users of small office machines to production centres, as well as mail rooms. Neopost s flexible, modular and evolving document systems provide a tailored response, whether for putting a few items into envelopes, processing large volumes of ordinary mail or even complicated correspondence campaigns with selective insertion of various contents. DS 35 THE SMALL FORMAT, BIG PERFORMANCE FOLDER/INSERTER - Flexibility, speed and ease of use - Silent and compact design - Highly intuitive colour touch screen able to configure up to 15 saveable programmes 20 The ability to connect the DS-35 to a mid-range mailing system puts uninterrupted mail processing within the reach of low-volume users, allowing for faster preparation of ready-to-post items.